Apple Explores In-House Payments Processing, Financial Products

Apple is trying to bring more of its operations in-house, including developing its own payment processing tech and infrastructure to make future financial products with, Bloomberg wrote Wednesday (March 30).

The report noted the idea is “ambitious,” citing sources familiar with the matter. It would reportedly cut down on the tech giant’s reliance on outside partners eventually, in a plan taking place over multiple years.

This would come with new approaches to payment processing, risk assessment for lending, fraud analysis, credit checks and more, including things like dispute handling, per the report.

Rather than focusing on Apple’s current lineup of services, the plan seems to be focused on future products. Apple’s current push would also make the company a bigger force in financial services.

Bloomberg wrote that part of the project has been called “Breakout” in internal communications. Sources told the publication that the name highlights the idea of “breaking away” from the existing financial system, and the project is reportedly Apple’s biggest foray into finance.

This could be a hurdle to get over, with other tech companies — like Meta and Alphabet — having attempted similarly ambitious projects, only to scale them back later. In Meta’s case, that included its digital coin, and in Alphabet’s, its plan for bank accounts.

The company’s lineup already includes the Apple-branded credit card, peer-to-peer payments, the Wallet app and a mechanism for merchants to accept credit cards from an iPhone.

Apple is also reportedly making its own subscription service for hardware, and the tech giant has a buy now, pay later (BNPL) product coming for Apple Pay transactions.

PYMNTS wrote that Apple also plans to make around 20% fewer iPhones in the next quarter than originally planned.

See also: Apple Slashing iPhone SE, AirPods, iPhone 13 Production

This is a sign that consumer electronics demand has fallen in the wake of the Russia-Ukraine war, according to a report from Nikkei Asia.

Apple rolled out its 2022 iPhone SE earlier this year, which was a more affordable 5G-capable phone. It now plans to scale back production by 2 or 3 million this quarter, along with cutting back on its production of AirPods earphones.